Hillsborough real estate broker looking at long stint in prison

Published 1:28 pm, Wednesday, August 1, 2007

2007-08-01 13:28:31 PDT -- A real estate broker from Hillsborough faces as much as 169 years in prison after pleading no contest to felony charges that he bilked investors out of more than $43 million.

The investors' money was ostensibly to be used to fund residential loans secured by deeds of trust on property in the Bay Area, prosecutors said. The investors were supposed to receive interest payments and a stake in the properties.

Instead, prosecutors say, Schneider sold deeds of trust for individual properties to multiple investors and then would record only one of the deeds with the county, Lohman said. Schneider went so far as to forge deeds to fool investors, she said.

He would take out interest-only loans and make the initial loan payments -- making it appear all was fine with the properties -- and then default when the main balance came due, Lohman said.

Schneider was arrested in May 2006 after the scam fell apart when victims failed to receive interest payments as scheduled.

Horowitz contended that Schneider "didn't plan to do this. It was something that he fell into trying to make a failing business continue. He didn't have any long-term plan to keep the money. He was always hoping that he would make a fortune in his real estate investments and pay everybody back."

Schneider is essentially throwing himself on the mercy of the court, Horowitz said. Sentencing is scheduled for Nov. 8 in Santa Clara County Superior Court.

"He knows he has to take his punishment," Horowitz said. "But it should be less than if he had kidnapped these people at gunpoint and held them for ransom, which would carry about the same sentence" as Schneider is facing.